The real problem with oil: it's going to run outby David Fleming / November 20, 2000 / Leave a comment
Published in November 2000 issue of Prospect Magazine
Beneath the seabed off the coast of Saudi Arabia is an oil field called Manifa. It is giant, and its riches are almost untapped. There is, however, a snag. Its oil is heavy with vanadium and hydrogen sulphide, making it virtually unusable. One day the technology may be in place to remove these contaminants, but it will not be for a long time, and when, or if, it becomes possible, it will do no more than slightly reduce the rate at which the world’s oil supplies slip away towards depletion. Even this field has one advantage over the massive reserves of oil which middle east suppliers are said to hold, ready to secure the future of industrial civilisation. Unlike those fantasy fields, Manifa does actually exist.
In region after region, the story is of ageing fields, of the wrong sort of oil, of nitrogen being pumped into wells to keep up the flow, of new areas (such as east of Greenland) turning out to be dry. Britain’s North Sea oil is at its peak now. The giant fields in Alaska, the former Soviet Union, Mexico, Venezuela and Norway are all past their peak. The US’s own oil supplies have been declining since 1970 and now account for less than half its needs. There is a possibility of some big finds off the coast of west Africa, but their development is still years away, and they are not on a scale capable of making a difference. The only producers with an oil resource which may be capable of keeping oil flowing into the world market at a roughly constant level are the middle east Opec five-Saudi Arabia, Iran, Iraq, Kuwait and the United Arab Emirates. And even in these countries, the closer you look, the less they have to offer.
Most of Saudi Arabia’s reserves of oil are held in one huge field, the Ghawar. It has been pumped since 1948 and, not surprisingly, it is showing signs of exhaustion with its southern end now flooding with water. Saudi Arabia can keep its production roughly constant for another seven to ten years before it too has used up hal…